Archive for March, 2011

Last week, the central government said it would pick up the tab for almost all of the rebuilding in the coastal areas of northeastern Japan devastated by the earthquake and tsunami of March 11. This is obviously a big relief to local governments in the affected cities and towns, many of which saw entire infrastructures wiped out in a matter of minutes.

This property condemned: Building damaged in 2007 Ishikawa earthquake

The stickier problem is what to do about private property. Residents’ possessions, including homes, are spread out over vast expanses of no man’s land. To clean up the mess, laws regarding private property will have to be bent or even ignored. The government has already issued guidelines for the cleanup, even though it doesn’t necessarily have a clear understanding of the situation on the ground. But local governments are demanding something be done so that they can get to work. The governor of Miyagi Prefecture asked the Maritime Safety Agency to help it process all the boats and ships strewn over the blasted landscape. As of last weekend, the agency said it had processed 245 vessels but had only “returned” 13 to their owners. The rest were brought to a makeshift area that is causing problems since level land is desperately needed for temporary housing. But with harbors destroyed, there is no place to put the vessels while the agency identifies owners, who are then expected to dispose of them. With more than 6,000 people still listed as missing in Miyagi, something needs to be done quickly.

The Tokyo Broadcasting Service’s main nuclear energy pundit is Muneo Morokuzu, a University of Tokyo professor who used to work for Toshiba. Earlier this week, while a commentator on the morning show “Asa Zuba!,” he was asked by host Monta Mino about Tokyo Electric Power Company’s scheduled blackouts (keikaku teiden), which have been playing havoc with customers’ lives in the Kanto region. “These problems always have the greatest effect on the most vulnerable people,” Morokuzu said.

Home before dark: Machiya Ekimae station on the Arakawa line

His remark seems to be true, though perhaps not in the way he intended it. Since Tepco implemented power outages to save electricity after the failure of the Fukushima No. 1 nuclear reactor caused by the earthquake/tsunami of March 11, certain areas of the Kanto region have been purposely subjected to occasional blackouts. The outages are supposed to be planned and announced in advance, but so far they’ve been sporadic. Announcements are made and then changed on an almost hourly basis. Originally, the idea was to have “rolling blackouts” (rinban teiden), meaning that each targeted area would have its electricity cut off in succession, which sounded like the fairest way to do it. However, it never happened that way, and now the official name of the scheme is “scheduled blackouts.” The affected areas cover Tokyo and eight prefectures, with the blackout plan collecting disparate neighborhoods into five “groups.” But the neighborhoods were never specified clearly, and even if your neighborhood was targeted for a scheduled blackout, you often didn’t know if it was really going to happen until the designated hour arrived.

Last week, when all those foreigners bolted the country they got a nice little windfall from the ongoing crisis if they traded in all their hard-earned yen for whatever currency they’d need to get by back home. When markets opened after that nerve-wracking weekend the U.S. dollar, for instance, had lost up to ¥5 since the week before, from 82 to 77. A lot of people were dumbfounded, since such a reaction flies in the face of so-called textbook economics. Why would Japan’s currency get stronger as a result of such a disaster? Wouldn’t people be trying to unload their yen?

Whoops!

The easiest explanation for the surge was the idea of “repatriation.” Japanese companies with investments overseas in other currencies quickly exchanged much of their holdings into yen in order to pay for reconstruction or, in the case of insurance companies, to pay benefits to people and businesses with damage policies. However, as most Japanese economists have pointed out since then, that alone wouldn’t have explained such a pronounced increase in such a short time.

According to the Mainichi Shimbun, the Great Hanshin Earthquake of 1995 created a precedent for the yen surge. Three months after that earthquake destroyed much of Kobe, the yen was the highest against the dollar that it had ever been in history up to that point. At the time, Japan’s GDP was still the envy of the world, and investors with extra cash decided to buy yen, believing that it was sounder than a lot of other investments, especially since Kobe would require lots of money to rebuild. They were basically chasing the repatriated yen. As always, Japan’s exporters panicked. The Bank of Japan intervened to bring the yen down, but they were unsuccessful. It wasn’t until the summer, when the United States and Europe joined in the intervention, that the yen started to drop.

An article in this week’s Sunday Mainichi implies that Tokyo Electric Power Company’s series of planned blackouts in the Kanto region to address power shortages as a result of the failure of the Fukushima nuclear reactors is a kind of demonstration, the point of which is to show customers that they really need those nuclear reactors, even if they are on the verge of rendering the Tohoku region radioactive. Though the article’s tone is cynical, anti-nuclear forces have been accusing Tepco of essentially the same PR strategy for years. Faced with another serious power shortage in 2003, Tepco threatened blackouts unless customers cut back after the company was forced to shut down reactors for emergency inspections in light of a safety scandal.

Electricity users in the Kanto region are already dealing with periodic power outages to save energy, and because we’re doing as we’re told, some planned outages have been canceled. The problem with generating electricity over a conventional power grid is that once you generate it you can’t recover any that isn’t used. And unlike thermal generators that use fossil fuels, nuclear reactors cannot be turned up or down at will. Once they are operating it takes months to turn them off. Tepco’s output is basically a blend of constant nuclear power and fluctuating thermal and other forms of power generation. The 10 Fukushima reactors provided 14 percent of Tepco’s power, about 50 million kilowatts.

Average power consumption at any given moment during March in the Kanto region is estimated at 47 million kw. This is far less than the 65 million kw that are normally consumed during the peak days of summer, when air conditioners are on, but last Monday, when Tepco launched the planned blackouts, the maximum output available was 31 million kw, so Tepco had to convince homes and businesses to use less than that. If they didn’t, they would have to cut power to the designated “groups.”

Last week’s earthquake and tsunami has engendered a nationwide run on retailers that has alarmed the authorities. Even in Hiroshima, which was totally unaffected by either catastrophe and isn’t in a related earthquake zone, people are said to be stripping store shelves of batteries. Renho, the Democratic Party of Japan superstar who heads the consumer affairs ministry, blasted the mentality that has led to this behavior, saying that she could understand why people might want to buy batteries and portable cookers and even bicycles, but “natto and chicken”? She stressed that it causes shortages of much needed supplies to the afflicted areas and used the word kaishime to describe these actions, which means to “corner the market,” except that she isn’t talking about companies, but individual consumers. In that regard it seems an imprecise term, but the negative connotation is what’s important.

Yes, we have no natto

This is not to say that the Japanese people care nothing about the thousands of victims, or that businesses aren’t doing all they can to help out. Banks in the affected region are allowing depositors to access their money without passbooks or cards. But there has also been a hotline set up for people in the area who suspect they are victims of binjo neage, or opportunistic over-pricing. That sounds more like what Renho had in mind when she talked about kishime, but what she meant was different — and a problem that seems almost intractable.

The problem was first made apparent during the oil crisis of 1973, exemplified by an incident that has since become a staple of TV nostalgia shows. When foreign exporters raised the price of oil by as much as 70 percent, Yasuhiro Nakasone, then the Minister of Economy Trade and Industry, was said to have advised citizens to cut down on the use of paper products. Soon thereafter, a supermarket chain in Osaka called Peacock ran a sale on toilet paper, and, responding to rumors of paper shortages, some 300 people quickly cleared the store of some 500 TP packages. The store, delighted, restocked with higher priced TP, which was snatched up just as quickly, but this time the image of housewives fighting for toilet paper was captured by TV crews and became big news. After that, there was a national run on toilet paper.

The average household is seeing tighter food budgets thanks to worldwide rise in the prices of basic commodities. And while these price rises will curb deflation, they won’t have much of an effect on the downward pressure that deflation has put on wages. So while food prices will go up, your paycheck will remain the same.

Get stuffed

Still, supermarkets and other food retailers will likely try to keep their prices as low as possible for competitive purposes. And since everyone is doing that, marketing chiefs have to come up with ways to get you into their stores in the first place. Traditionally, supermarkets put on shows: They buy a huge, expensive tuna and have some knife expert come in and slice it up in a grand, flamboyant way. The housewives love it, and while they’re there they buy other stuff. With penny-pinching in vogue like never before, loss-leader type events are more attractive. Loss leaders are products or product lines that are sold below cost mainly for promotional purposes. The style of promotion that’s become most prominent in recent years at food stores is tsume-hodai.

Tsumeru means “to stuff,” and hodai means “as much as you want.” In tsume-hodai sales, the retailer offers selected wares, usually produce, in bulk. Customers stuff bags provided by the retailer with as much of a given product as they can fit into them and then pay a set low price for each filled bag. Some years ago when the idea was first launched, it was usually only low-priced vegetables that were offered, like potatoes or onions. Eventually, vegetables were joined by fruit, then fish, and even sometimes meat. Last weekend we saw a tsume-hodai table set up on the street outside a discount supermarket offering pastries and other baked goods. Given the enthusiasm with which the housewives were stuffing the pastries into their plastic bags we assumed by the time they got home they would be filled with sweet, doughy mush.

Some supermarkets have actually become famous for their regular tsume-hodai fairs, which typically attract evening news crews who like nothing better than the spectacle of middle-aged women pushing and shoving and cramming. The fad’s apex, however, is represented by outlets of the convenience store chain Lawson that feature Kobe Hotto Deli, a buffet of prepared food. Instead of throwing unsold food away, KHD offers its own brand of tsume hodai: You take a tray of cooked rice and top it with as many dishes as possible for the uniform price of ¥390, which is usually what a dish would cost individually. The only condition is that the lid has to fit snugly over it. No leaning towers of fried prawns.

In January, Diet member Seiko Noda gave birth to a baby boy after years of medical treatments to help her become pregnant. The baby was the product of a third-party ovum that was acquired in the United States, fertilized with her partner’s sperm and then implanted in her uterus. Though the media initially reported the delivery as being problem-free and both mother and child coming through with flying colors, since then other reports have revealed that the boy is still in the hospital with serious health problems. The egg donor is said to be a young woman, but Noda is 50 and the older the mother is the higher the probability that there will be complications during gestation.

Dr. Yahiro Netsu of the Suwa Maternity Clinic poses with Seiko Noda for the clinic's website

Noda could have reduced the chances of complications if she had opted to use a surrogate mother, but in that case the Japanese authorities would not have recognized the child as hers, which was a very important consideration for her. Nevertheless, surrogacy is becoming an increasingly popular alternative for Japanese couples who cannot conceive on their own and are not partial to adopting (which is almost all of them, since adoption of infants is, for reasons both cultural and legal, not as popular in Japan as it is in the West).

The problem is that there is no Japanese law regulating surrogacy, and the Japan Society of Obstetrics and Gynecology disapproves of the therapy in principle. At least one doctor has bucked the society, however, and offers therapy to women who can’t have children on their own, but reportedly the surrogate mothers he uses have to be related to the patients. The principal recourse for Japanese women who want to use this method is America, where it costs anywhere from $20,000 to $120,000 depending on what the surrogate mother requests for her nine months of service.